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References
Monday, 12 November 2007 15:36
 David GreenhalghYour legal questions answered by David Greenhalgh, Head of Employment Law at solicitors H2O Law LLP

QUESTION – “I have recently received requests for references in relation to several of my former employees and I am unsure of whether and how I should respond.  The reference requests relate to Eric, who was dismissed for gross misconduct.

Shelley, who left just after I had commenced disciplinary action against her for her poor quality work but before the disciplinary process was complete and finally Bill, who left with a good record.  I sent his new employer a glowing reference, but, I have since discovered following a detailed investigation that he stole money from my company.

 

ANSWER – Firstly, employers have no legal obligation to provide a reference.  It is perfectly acceptable to have a company policy which states that your company does not give references.  If you decide on such an approach you must apply the same rule for all.  If you make exceptions you could expose your business to a discrimination claim.

If you decide to provide references, whilst they do not have to be full and comprehensive, you have a duty of care to the recipient (the prospective new employer) to ensure that references that are given are true, accurate, fair and are factually correct. You also have a duty of care to the employee, i.e. the subject of the reference, to ensure that the reference given is accurate and fair.

References should contain any pertinent information about the departing employee (imagine that you are that employer and think about what you would like to know before you hired someone).

If your company policy is to give references, we advise that they should only ever be basic in nature and be limited to confirming the employee’s dates of employment and role.  If you receive a list of reference questions from a prospective employer you should respond by giving a basic reference only and explain this is your company policy.

In relation to Eric, if you decide to give any form of reference it will have to be full and factual referring to the disciplinary action taken against him and the outcome i.e. his dismissal.  If you fail to mention these facts and Eric later repeats his gross misconduct whilst working for the new employer you could be at risk of being sued by the new employer for any loss it suffers.  The new employer would argue that it asked you for a reference upon which you knew it would rely and that in failing to mention important facts about Eric’s misconduct and dismissal you were negligent and should be held responsible for any loss arising.

Many employers often negotiate compromise agreements with staff especially where there has been a dispute or a threat of legal action.  It is common for such agreements to include a detailed agreed reference.  The danger here is obvious; if you know an employee is incapable or has acted badly and the agreed reference does not reflect this, or, worse, paints a glowing picture of the employee, then you are exposing your business to risk.  Employers face a difficult balancing act between the risk of being sued by the employee if he/she does not receive a compromise and the risk of being sued by a new employer which has relied on the reference which is either incomplete or misleading.

If you decide to give a reference you will also owe a duty to your former employee to make sure that the reference is accurate and is not provided negligently.  Consequently, to protect your business from possible claims for negligence you should never give a reference until a full investigation and/or disciplinary process has been completed.  In that way, you should be able to justify on paper what you state about the employee’s misconduct in a reference.  In relation to Shelley, as she left before the disciplinary process could be completed the best advice would be not to give any reference until such time as the disciplinary process is complete.

Whilst any reference given must be true, accurate and factually correct, you must also take care to ensure that you are not selective about the information you include in a reference and/or or do not leave out anything of material importance which may lead the recipient to form a misleading impression of the employee. For example, if you provide a reference which fails to mention the fact that the employee was subject to disciplinary proceedings and was dismissed, this will arguably lead a reasonable recipient to assume that there were no issues with that employee and that their departure from your company was amicable.

Where an employer has given a short form reference in respect of an employee and later discovers after a full investigation that the employee was guilty of misconduct, the employer should then send a further reference giving the full picture.
In relation to Bill, although your original reference was true and accurate at the time of writing, the fact that you provided a reference means that you have a duty of care to the new employer to update it with any new pertinent information or changes to the information provided in the original reference.  Our advice would be to send a supplementary written reference stating that the original reference was true and accurate at the time of writing; but, that you wish to inform the new employer of some changes to the information originally provided. You should then set out a brief summary of the allegations against the employee, and details of any investigation that has been carried out, and your conclusion. Providing this supplementary information will absolve you from any liability to the new employer.  Again you need to be sure that a detailed investigation has been carried out into Bill’s alleged misconduct, that he has been given a chance to explain his actions and that you can justify having formed a genuine and reasonable belief in his guilt.

We advise strongly against giving telephone references as anything you say will be open to distortion and it is difficult to prove what information you actually gave (other than keeping a detailed written note of the conversation – but even this is open to argument).

  • If you have any queries about any of the matters raised in this article or any other employment law issue please contact David Greenhalgh at H2O Law LLP on 020 7405 4700.



Whilst H2O Law LLP makes every attempt to ensure the accuracy and reliability of the information contained in this article the information should not be relied upon as a substitute for formal legal advice.  H2O Law LLP, its employees and agents will not be responsible for any loss, howsoever arising, from the use of or reliance upon this information.

© H2O Law LLP 2007
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